SUPPLEMENTAL  REPORT 

ON 

COMPREHENSIVE  SYSTEM  OF 
PASSENGER  SUBWAYS 

FOR  THE 

CITY  OF  CHICAGO 

BY  THE 

HARBOR  AND  SUBWAY  COMMISSION 


OCTOBER  30,  1912 


Digitized  by  the  Internet  Archive 
in  2015 


https://archive.org/details/supplementalrepoOOchic 


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REPLY  TO  CRITIOISMS  OF  A COMPREHENSIVE  SYSTEM 
OF  PASSENGER  SUBWAYS. 


Chicago,  October  30,  1912. 

To  the  Honorable, 

The  Committee  on  Local  Transportation, 

City  Council,  Chicago. 

Gentlemen  : 

Since  Sepetmber  10  last,  on  wliicli  date  tbe  Harbor  and 
Subway  Commission  and  a sub-committee  of  your  honorable 
body  jointly  recommended  tentative  routes  and  plans  for  a 
comprehensive  system  of  municipal  passenger  subways,  numer- 
ous criticisms  of  such  report  have  been  made  before  your  hon- 
orable body  at  public  hearings. 

We,  the  undersigTied  members  of  the  Harbor  and  Subway 
Commission,  at  your  request,  have  classified  and  summarized 
the  objections  raised  by  various  critics  to  a comprehensive  and 
independent  system  of  city-owned  passenger  subways  , and  sub- 
mit herewith  certain  facts  and  figures  that,  in  our  judgment, 
furnish  complete  and  irrefutable  proof  that  such  objections  lad: 
the  results  of  experience  to  support  them. 

We  take  for  granted  that  all  the  critics  of  our  subway 
report  who  have  appeared  before  your  ihonorable  body  are 
genuinely  in  favor  of  such  improvements  and  developments  in 
Chicago’s  transportation  facilities  as  are  feasible  as  well  as 
necessary. 

CLASSIFICATION  OF  CRITICISMS. 

In  discussing  such  betterments  of  local  transportation  facili- 
ties, on  broad  lines,  all  the  objections  to  a comprehensive  system 
of  municipal  passenger  subways  fall  into  natural  groups  as 
follows: 

(1)  That  Chicago  can  obtain  genuine  rapid  transit  with- 
out a comprehensive  system  of  passenger  subways  by 
improving  and  extending  the  existing  means  of  trans- 
portation, or,  in  other  words,  that  Chicago’s  present 
and  future  traffic  can  be  properly  cared  for  by  bringing 
the  surface  and  elevated  roads  up  to  modem  standards 
of  routing,  equipment  and  service. 


2 


(2)  That  a comprehensive  system  of  passenger  subways 
would  mot  pay  financially,  or,  in  other  words,  that  the 
present  or  probable  future  volumes  of  passenger 
traffic  would  be  inadequate  to  support  a comprehen-  ^ 
sive  system  of  subways  in  addition  to  existing  means 
of  transportation. 

(3)  That  an  independent  system  of  municipal  passenger 
subways,  even  with  a large  carrying  capacity  supple- 
mental to  existing  lines,  would  increase,  rather  than 
diminish,  traffic  congestion  in  the  down-town  or 
“loop”  district. 

(4)  That  the  effect  of  a comprehensive  system  of  passen- 
ger subwaj^s  would  be  to  upbuild  the  business  facilities 
of  the  down- town,  or  “loop”  district,  at  the  expense 
of  outlying  business  and  residential  districts. 

(5)  That  genuine  rapid  transit  in  Chicago  can  be  obtained 
by  making  new  contracts  with  a privately-owned  trans- 
portation monopoly,  such  contracts  to  include  the  ex- 
clusive use,  for  operating  purposes,  of  such  limited 
down-town  subways  as  may  be  built  at  the  City’s 
expense,  to  enable  the  existing  companies  to  get  rid 
of  down-town  or  “loop”  district  congestion. 

THE  OBVIOUS  ANSWERS. 

We  will  answer  these  objections  in  order,  with  a brief  sum- 
mary of  demonstrated  facts. 

In  the  first  place,  we  submit  to  your  honorable  body  that 
the  critics  who  have  attacked  the  subway  report,  on  the  lines 
enumerated  above,  have  failed  to  produce  any  evidence  that 
adequately  answers  or  refutes  the  main  contention  in  our  report, 
namely: 

That  genuine  rapid  transit  in  Chicago  is  impossible  without 
a comprehensive  system  of  municipally-owned  passenger  sub- 
ways radiating  to  outlying  sections  of  the  city. 

Tliere  is  no  dispute  over  the  fact  that  passenger  traffic 
over  the  intramural  roads  of  any  city  increases  in  ratio  as  the 
city  grows  in  population.  Chicago,  as  a concrete  example,  in- 
creased the  number  of  rides  per  capita  on  local  transportation 
lines,  according  to  data  from  available  statistics,  as  follows : 


Year.  Population.  Rides  Per  Capita. 

1900  1,700,000  217 

1905  1,940,000  261 

1910  2,200,000  321 


1 


3 


Thus,  at  the  outset,  we  find  Chicago’s  population  increas- 
ing at  the  normal  rate  of  about  60,000  per  year,  or  to  be  con- 
servative, about  500,000  in  ten  years.  According  to  the  table 
printed  above,  the  number  of  rides  per  capita  increases,  during 
a ten-year  period,  about  50  per  cent. 

It  is  apparent,  on  the  face  of  such  figures,  that  even  were 
existing  lines  of  transportation  increased  to  their  fullest  capacity 
they  could  not  possibly  care  for  the  constantl}"  increasing  de- 
mand for  transportation  facilities  as  the  city  grows. 

INCAPACITY  OF  ENISTINC  SYSTEMS. 

At  present  the  surface  and  elevated  lines  in  Chicago  have 
an  aggregate  seating  capacity  of  about  85,000  passengers  during 
the  rush  hour.  The  number  of  passengers  they  actually  handle, 
with  and  without  seats,  during  the  rush  hour,  is  approximately 
160,000.  This  condition  is  steadily  growing  worse. 

Thus  it  is  evident  that  were  the  seating  capacity  of  the 
surface  and  elevated  roads  approximately  double  during  the 
rush  hour,  they  would  not  much  more  than  care  for  the  present 
demands  of  daily  passengers,  without  overcrowding.  Even  with 
double  their  present  capacity  they  would  not  be  in  a position 
to  keep  jDace  with  the  ever-increasing  demands  for  transporta- 
tion facilities,  as  the  population  grows. 

Again,  there  is  no  such  thing  as  genuine  rapid  transit  unless 
it  is  continuous  rapid  transit  from  the  embarking  point  to  the 
point  of  destination. 

The  actual  time  saved  by  the  operation  of  passenger  sub- 
ways, in  comparison  with  the  time  consumed  in  the  operation 
of  either  elevated  or  surface  cars,  for  a given  distance,  is  one  of 
the  strongest  practical  arguments  for  the  installation  of  sub- 
ways. 

For  instance,  let  us  take  a south  side  point,  say  63rd  Street 
and  Stony  Island  Avenue,  as  the  embarking  point,  and  Madison 
Street  as  the  down-town  destination. 

The  most  careful  comparison  of  the  time  required  for  the 
operation  of  cars  or  trains  over  this  distance,  by  the  ditferent 
methods,  shows  the  following  results : 

Elevated  express,  about  31  minutes. 

Surface  cars,  about  53  minutes. 

Subway  trains,  about  25  minutes. 

The  subway  would  total  about  20  par  cent  less  time  than 
the  elevated,  and  50  per  cent  less  time  than  the  surface  ears. 


4 


This  is  theoretical.  The  actual  time  consumed  by  elevated  or 
surface  cars,  especially  during  the  rush  hours,  depends  upon  so 
many  conditions  that  it  is  impossible  to  fig-ure  on  any  certain 
time. 

For  instance,  take  the  elevated.  Those  who  use  the  south 
side  line,  in  rush  hour  periods,  feel  almost  certain  of  reaching 
a point  between  12th  and  Congress  Streets  on  time,  but  from 
this  point  to  the  stations  on  the  loop,  it  is  almost  as  certain  that 
they  will  be  delayed.  As  a rule  it  takes  as  much  time  from  this 
point  as  it  has  taken  on  the  rest  of  the  line.  There  were  days 
last  winter  when  elevated  patrons  could  not  use  this  line  on 
account  of  snow  and  ice.  The  entire  structure  being  exposed  to 
the  weather,  traffic  is  more  or  less  subject  to  interruption  in 
many  ways.  The  loop,  with  its  crossings,  limits  the  number 
of  trains  that  can  be  operated,  the  rule  being  to  allow  only  a 
certain  number  of  trains  of  each  road  on  at  a time.  When  each 
road  has  its  allotment  the  trains  must  stop  until  a vacancy 
occurs.  Fires  adjacent  to  the  structure  often  block  the  trains. 

As  for  the  surface  lines,  there  is  no  possible  way  in  which 
they  can  be  utilized  for  genuine  rapid  transit,  especially  rapid 
transit  for  considerable  distances.  While  the  surface  lines  are 
as  much  of  a necessity,  in  their  proper  sphere,  as  are  passenger 
subways,  their  usefulness  must  necessarily  be  confined  to  local 
traffic  in  the  congested  districts,  and  to  their  use  as  feeders  for 
rapid  transit  lines  in  the  outlying  districts,  where  they  will  be 
free  from  traffic  interruptions  at  crossings,  and  other  obstacles 
met  with  in  the  congested  districts. 

The  speed  of  surface  cars  will  always  be  limited  on  account 
of  pedestrians  and  vehicles  at  street  crossings.  It  is  one  of  the 
grave  municipal  issues  of  today— the  limitation  of  surface  car 
speed  to  prevent  the  dreadful  and  increasing  casualties. 

CONTINUOUS  SPEED  BY  SUBWAYS. 

One  of  the  strongest  arg;uments  for  passenger  subways — 
not  merely  subways  in  the  down-town  district,  but  rapid  transit 
arteries  penetrating  the  outlying  sections— is  that  speed,  com- 
fort and  safety  can  be  uniformly  maintained  during  a continuous 
ride,  whether  it  is  a few  blocks  or  a dozen  miles. 

The  actual  time  saved  by  the  daily  patrons  of  passenger 
subways,  in  going  to  and  from  their  business  or  their  homes, 
will  be  an  enormous  economical  asset.  It  will  add  whole  days, 
and  even  weeks,  to  the  yearly  aggregate  of  available  time  for 
business  or  recreation,  in  case  of  regular  subway  patrons. 


5 


We  believe,  on  this  point,  that  jowr  honorable  body  cannot 
do'  better  than  weigh  the  matured  expression  of  expert  investi- 
gators on  the  rapid  transit  issue  in  New  York  City  when  the 
original  comparison  was  being  made  between  passenger  sub- 
ways and  elevated  or  surface  lines. 

In  1894,  the  rapid  transit  issue  in  New  York  had  become  so 
absorbing,  and  vital  to  the  city’s  welfare,  the  Chamber  of  Com- 
merce undertook  an  independent  investigation  of  the  whole  mat- 
ter. In  summarizing  the  conclusions,  the  signers  of  the  Cham- 
ber of  Commerce  report  in  1905,  used  the  following  language; 

‘ ‘ It  was  concluded  that  to  get  rapid  transit  the  undergTound 
system  must  be  adopted;  that  it  was  impossible  to  get  real  rapid 
transit  with  an  overhead  railway.” 

Prom  the  same  report,  on  page  7,  the  following  abstract  is 
taken : 

“It  may  be  that  ten  years  ago,  or  even  five  years  ago,  many 
people  in  New  York  believed  that  existing  systems  were  the  best 
that  could  be  devised;  that  the  electric  cars  on  the  surface  and 
the  elevated  trains  were  entirely  satisfactory;  and  that  nothing 
remained  but  to  extend  accommodations  as  population  increased. 
They  had  become  used  to  the  trouble  of  climbing  to  sta- 
tions well  lifted  above  the  streets.  They  had  forgotten  about 
dangers  of  ‘roads  upon  stilts.’  They  ignored  the  discomfort 
to  dwellers  along  the  lines.  They  recognized  how  unsightly  the 
structures  were,  but  sank  regrets  in  view  of  their  utility.  They 
equally  minimized  the  objections  that  may  be  raised  against  the 
use  of  streets  by  a surface  system  that  is  noisy  to  a degree,  that 
greatly  inconveniences  ordinary  traffic,  and  that  in  each  and 
every  year  maims  and  kills  many  victims.  It  is  possible  today 
to  predict  with  safety  that  the  elevated  structures  will  all  be 
taken  down.  It  is  at  least  possible  to  hope  that  the  enormous 
cars  now  propelled  rapidly  over  our  streets  by  electricity  will 
be  disused  in  the  more  or  less  distant  future,  and  a system  of 
transportation  introduced  that  will  be  more  convenient  and  less 
objectionable.  For  it  would  be  unreasonable  to  suppose  that 
the  evolution  of  the  past  in  the  matter  of  transit  for  cities  is  to 
end  with  the  methods  now  in  use.  The  ultimate  goal  is  a system, 
or  systems,  that  will  be  not  unsightly,  that  will  be  noiseless  to  a 
reasonable  degree,  that  will  not  cause  undue  inconvenience  to 
any  persons  or  interests,  that  will  be  safe  for  passengers  and 
not  dangerous  to  others,  and  that  will  be  rapid.  This  is  the  goal ; 
and  in  view  of  progress  heretofore  made,  and  in  view  of  prog- 


6 


ress  at  large,  one  may  say  with  confidence  that  it  will  be 
reached.  ’ ’ 

President  Orr,  in  his  address  on  the  opening  of  New  York’s 
first  subway,  said: 

“And  I am  also  led  to  believe  that  subway  construction 
under  municipal  ownership  is  only  in  its  first  stage  of  develop- 
ment. Every  city  is  divided  into  two  great  sections,  the  busi- 
ness and  the  residential,  and  the  larger  the  city  the  further  these 
sections  will  be  apart,  and  passenger  transportation  is  an  im- 
portant factor.  Surface  railroads  are  serviceable  for  short  dis- 
tances, and  will  always  have  their  place,  but  they  are  not  ap- 
plicable to  long  distance  street  travel.  At  best  they  are  an  ag- 
gregation of  grade  crossings,  subject  to  continual  interruptions 
that  cannot  be  obviated,  nor  can  dependence  be  placed  upon 
reaching  a destination  at  a given  time. 

“It  cannot  be  denied  that  elevated  railroads  have  proved 
of  inestimable  value  in  hastening  the  city’s  development,  and 
also  a great  personal  convenience  as  to  time;  but  they  are  un- 
sightly in  appearance,  interfere  with  light  and  ventilation  in  the 
congested  streets,  and  in  many  instances  injure  the  value  of 
abutting  property,  and  at  times  are  subject  to  serious  delays 
through  atmospheric  changes.  I question  whether  further  ele- 
vated railroad-building  will  have  many  advocates  in  the  future, 
except  in  sparsely  inhabited  outlying  territory,  or  for  bridge 
approaches,  or  that  it  would  have  been  advocated,  in  the  first 
instance,  if  the  electric  conditions  of  today  had  been  obtained. 
In  subway  passenger  service  all  these  objectionable  features  are 
eliminated.” 

We  lay  special  stress  upon  utterances  like  these,  because 
they  represent  the  deliberate  conclusions  of  men  of  large  affairs, 
who  made  a painstaking  investigation  intoi  the  different  pro- 
posed solutions  of  New  York’s  transportation  problem,  and  who 
were  admittedly  uninfluenced  by  any  other  considerations  than 
the  public  good.  It  was  owing  to  such  weighty  testimony  as  this, 
from  disinterested  sources,  that  New  York  finally  adopted  under- 
ground construction  as  the  only  permanent  means  of  getting 
genuine  rapid  transit. 


7 


THE  FIITANGIAL  PROBLEM. 

We  now  come  to  tlie  second  group  of  objections,  which  we 
have  put  in  crystallized  form,  as  follows: 

(2)  That  a comprehensive  system  of  passenger  subways 
would  not  pay  financially,  or,  in  other  words,  that  the  present 
and  probable  future  volumes  of  passenger  traffic  would  be  inade- 
quate to  support  a comprehensive  system  of  subways  in  addi- 
tion to  existing  means  of  transportation. 

In  the  first  place,  we  wish  to  call  the  attention  of  your  hon- 
orable body,  and  to  lay  special  emphasis  thereon,  to  that  para- 
graph in  our  report  of  September  10  which  points  out  the  dis- 
tinction between  a municipally-owned  transportation  system 
and  one  owned  and  operated  by  private  interests  primarily  to 
earn  dividends,  as  follows: 

“This  Commission  and  your  sub-committee  have,  moreover, 
endeavored  as  far  as  possible  to  avoid  the  theory,  so  universal 
in  laying  out  privately  owned  transportation  lines,  that  Chi- 
cago’s new  rapid  transit  subways  should  be  built  only  where 
they  will  yield  an  immediate  profit  from  operation.  Wliile  the 
possibility  of  profitable  operation  has  had  due  weight  in  each 
case,  we  have  sought  to  serve  the  best  interests  of  all  the  people 
of  Chicago  by  mapping  out  a subway  system  that  will  penetrate 
to  all  sections  of  the  city  at  the  same  time,  and  will  in  this  way 
tend  toward  the  symmetrical  building  up  of  all  sections  that  will 
thus  obtain  the  benefits  of  genuine  rapid  transit.  We  have 
acted  on  the  well-established  principle,  whenever  better  trans- 
portation becomes  a municipal  undertaking,  that  it  is  the  prov- 
ince of  transportation  improvements  to  equalize  the  prosperity 
of  localities,  in  so  far  as  a comprehensive  planning  of  subway 
routes  can  do.  It  is  obvious  that  a municipally-owned  subway 
system  can  afford  to  support,  for  a time,  the  less  profitable  ex- 
tensions out  of  the  surplus  earnings  of  those  routes  that  extend 
through  richer  and  more  populous  territory.  ’ ’ 

Even  with  this  important  consideration  in  mind,  let  us  ad- 
mit that  the  enlistment  of  large  capital  for  a passenger  subway 
undertaking  in  Chicago  rests  finally  upon  the  ability  to  dem- 
onstrate, beyond  any  possible  doubt,  that  the  subway  system  so 
built,  either  by  the  municipality  direct  or  by  private  capital,  or 
by  a combination  of  both,  will  yield  a legitimate  profit  on  such 
investment  from  the  traffic  it  will  create  and  receive. 

Let  us  therefore  take  the  estimate  of  capital  cost  of  the  in- 
dependent system  of  passenger  subways,  as  outlined  in  our  re- 
port— $131,000,000,  which  includes  equipment. 


8 


It  would  require  10  per  cent  on  this  capital,  or  $13,100,000, 
to  pay  fixed  charges,  according’  to  the  following  conservative 
estimate: 

Operating  expenses,  at  the  rate  of  40% 
on  gross  earnings  from  suhway  op- 
eration   4 per  cent 

Interest  on  capital  investment 5 percent 

Sinking  fund  for  gradual  extinction  of 

the  capital  debt 1 per  cent 

Total  10  percent 

FIXED  CHAKGES  OX  INVESTMEXT. 

We  will  further  illustrate  this  by  the  following  detailed 
figures : 

Estimated  cost  for  subway  system.  . . .$131,000,000 
Tlie  necessary  yearly  revenue  to  meet 
expenses,  5%  interest  on  capital 

invested  6,550,000 

1%  on  capital  for  sinking  fund 1,310,000 

Operating  expenses  40%,  equal  to 5,240,000 

Necessary  gross  earnings $ 13,100,000 

We  have  fixed  the  sinking  fund  allowance  at  1 per  cent,  on 
the  principle  of  a gradiral  amortization  of  the  capital  debt  that 
will  give  the  people  of  Chicago  a rnunicipally-ovned  subway 
system,  free  of  all  debt,  in  less  than  50  years.  The  “spread”  of 
the  capital  liability  can  be  made  to  cover  a shorter  or  longer 
period  at  the  city’s  pleasure.  A 1 per  cent  sinking  fund  will  pay 
oirt,  according  to  reliable  actuarial  figures,  the  entire  capital 
debt  in  about  47  years.  Meanwhile,  ‘the  city’s  interest  charge  is 
gradually  reduced  during  the  sinking  fund’s  operation,  and 
more  net  i>rofits  made  available  each  year. 

The  estimate  of  40  per  cent  of  gross  revenues  for  operating 
expenses  is  arrived  at  by  first  estimating  the  probable  traffic 
receipts  from  subway  operation,  according  to  well-established 
rules.  It  is  sufficient  to  show,  as  we  shall  now  proceed  to  do, 
that  the  traffic  in  sight,  and  available  for  subways  when  built, 
is  practically  three  times  greater  than  the  volume  necessary  to 
produce  enough  revenue  to  meet  all  fixed  charges. 

TEAFFIC  VOLUMES. 

We  have  selected  the  year  1918  as  being  approximately  the 
end  of  the  subway  construction  period,  if  such  construction  is 


9 


now  undertaken.  If,  in  the  year  1918,  the  subways  outlined  in 
our  report  should  be  finished  and  in  operation,  the  estimated 
volume  of  available  trafiic  is  shown  in  the  following  table : 
Estimated  population  in  City  of  Chicago 
year  1918,  based  on  a decreasing 


rate  of  increase 2,585,000 

Proportion  of  above  population  that  will 
be  served  by  the  subway,  i.  e.,  living 
within  one-half  mile  of  proposed 
routes  1,825,000 


This  estimate  is  based  on  the  natural 
increase  in  population  and  one  per 
cent  per  year  added  on  account  of 
subway,  which  was  the  case  in  New 


York. 

Estimated  rides  per  capita  per  annum.  . 395 

Total  rides  per  annum  available  for  sub- 
way zone 719,000,000 

Total  revenue  available $35,950,000 


We  have  shown  that  the  amount  of  revenue  required  to  pay 
10  per  cent  on  the  capital  investment,  for  operating  expenses, 
interest  and  sinking  fund,  is  estimated  at  $13,100,000. 

To  produce  this  revenue  requires  262,000,000  rides. 

The  total  available  rides  in  the  subway  zones  will  be  719,- 
000,000,  as  already  shown. 

The  total  revenue  that  will  be  avail- 
able from  these  aggregate  rides  is  $ 35,950,000 
The  percentage  of  the  total  rides  avail- 
able within  the  subway  zone  to 
meet  necessary  expenses  is,  there- 
fore   36.5  per  cent. 

In  other  words,  only  about  one-third  of  the  available  traffic 
in  the  subway  zones  is  required  to  meet  all  necessary  expenses. 

All  the  revenue  from  traffic  in  excess  of  this  one-third  will 
be  profit. 

The  revenues  for  the  surface  and  elevated  lines  in  1911  were 
$38,000,000.  If  the  increase  is  the  same  in  the  next  six  years, 
as  in  the  preceding  years,  and  they  had  the  capacity  to  care  for 
the  traffic,  the  receipts  should  be  at  least  $53,000,000. 

Chicago ’s  subways,  as  planned,  taking  one-half  mile  on  each 
side  of  the  same,  would  reach  1,540,000  people  at  the  end  of  1912. 
With  street  cars  in  the  outlying  districts  as  feeders,  this  should 
be  materially  increased. 


10 


Yet  the  total  revenue  from  traffic  required  to  make  Chi- 
cago’s subways  a paying  proposition  is  only  about  one-third 
the  present  revenues  of  the  surface  and  elevated  roads. 


Wliile  on  this  subject,  it  is  important  to  show  that  our  esti- 
mate of  40  per  cent  of  gross  receipts  for  subway  operating  ex- 
penses is  conservative,  and  based  on  actual  experience.  The 
fact  that  operating  expenses  on  surface  and  elevated  roads  run 
from  60  per  cent  to  70  per  cent  has  no  bearing  on  the  demon- 
strated fact  that  subways  can  be  operated  to  the  highest  point 
of  efficiency  for  less  than  40  per  cent  on  gross  receipts. 

The  published  statements  of  the  Interborough  Company  and 
the  New  York  Rapid  Transit  Commission  show  the  cost  of  opera- 
tion of  the  subways  in  New  York  to  be  as  follows; 


The  increase  in  the  last  year  was  largely  due  to  the  extra- 
ordinary expenditures  resulting  from  changes  in  subway  equip- 
ment which,  if  deducted,  would  leave  about  36  per  cent  for  1911. 

The  argument  is  made  that  New  York  is  not  a fair  compari- 
son because  the  travel  is  coming  and  going  at  the  same  time. 
This  is  in  direct  contradiction  to  the  report  of  the  Public  Service 
Commission.  In  speaking  of  the  business  center  the  latter  body 
says: 

“Travel  is  all  toward  this  district  in  the  morning  and  all 
away  from  it  in  the  evening.  ’ ’ 

As  a matter  of  fact  Chicago  has  a great  advantage  over 
New  York.  In  New  York,  the  subway  is  16  miles  long  and  ac- 
cording to  the  above  it  has  a haul  one  way,  while  in  Chicago 
it  is  about  16  miles  from  one  terminal  to  the  other.  To  illustrate, 
take  Wilson  Avenue  to  79th  Street  and  Cottage  Grove  Avenue. 
If  a train  starting  from  Wilson  Avenue  in  the  morning  will 
take  a load  down-town  and  coming  back  from  79th  and  Cottage 
Grove  will  take  another  load,  it  will  thus  earn  two  fares  for  the 
round  trip,  when  in  New  York  they  earn  but  one.  In  other 
words,  the  New  York  subway  is  16  miles  with  a residence  dis- 
trict at  one  terminal  and  a business  district  at  the  other,  while 
in  Chicago  with  the  16-mile  subway  we  have  a residence  district 
at  each  terminal  with  the  business  district  in  the  center,  thus 
making  our  average  haul  much  less.  As  further  evidence,  let  us 
make  a comparison  with  the  street  railways  in  Chicago. 


LOW  OPERATING  COSTS. 


1909 

1910 

1911 


39.50 

35.75 

43.18 


11 


The  operating’  expense  of  the  City  Railway  Company  is 
62  per  cent  of  gross  receipts.  The  trainmen’s  wages  are  35 
per  cent  of  the  operating  expense,  or  21.4  per  cent  of  the  gross 
receipts.  The  schedule  time  of  the  City  Railway  from  71st  and 
Cottage  Grove  Ave.  to  Wabash  and  Randolph  is  53  minutes.  -The 
subway  time  would  he  26.6  minutes.  For  10  cars  on  the  surface 
lines  it  would  require  10  motormen  and  10  conductors,  or  20  men 
at  29  cents  per  hour— $5.80  per  hour;  for  53  minutes  or  a trip 


down-town — $5.12. 

For  a 10-car  snbway  train : 

1 motorman,  34c  per  hour $ .34 

1 conductor,  25c  per  hour 25 

8 guards,  22i4c  per  hour 1.80 


$2.39  per  hour 

for  26.6  minutes  or  a trip  down-town,  $1.06.  This  one  item  would 
reduce  the  operating  expense  of  the  subway  to  45  per  cent  as 
against  62  per  cent  for  the  surface  cars.  There  is  also  a saving 
in  power  and  other  items,  to  say  nothing  of  interruption  and  ob- 
struction that  the  surface  cars  meet  with.  An  estimate  of  40 
per  cent  on  operating  expense  for  subways  is  very  conservative. 

CONSTRUCTION  FIGURES. 

Some  critics  have  claimed  that  we  placed  the  estimates  of 
subway  construction  cost  too  low. 

The  estimated  cost  of  construction  of  passenger  subways 
in  Chicago,  given  in  our  joint  report,  is  based  on  an  average 
estimated  cost  per  mile  of  single  track  of  $730,000,  the  cost 
of  course  being  greater  in  the  central  and  adjacent  parts  of  the 
city  and  less  in  outlying  districts. 

A reasonable  way  to  establish  the  sufficiency  of  this  estimate 
is  to  compare  it  with  the  actual  cost  of  subways  already  built, 
or  under  contract.  Mr.  Willcox,  chairman  of  the  Public  Service 
Commission  of  New  York,  in  a statement  issued  November  16, 
1910,  says : 

“The  average  cost  per  mile  of  track  of  the  municipal  rapid 
transit  routes  now  operated  by  the  Interborough  was  $784,351. 

“In  1905  the  president  of  the  Interborough,  in  a letter  to 
the  Rapid  Transit  Commission  giving  the  reasons  why  his  com- 
pany was  not  a bidder  on  the  routes  then  proposed,  stated  that 
his  engineers  had  found  that  the  increased  cost  through  labor, 
material,  methods  of  construction,  etc.,  would  increase  the  aver- 
age cost  per  mile  of  track  by  100  per  cent. 


“These  portions — that  is,  the  Lexington  Avenue,  with  the 
two  Bronx  Extensions,  Canal  Street,  Broadway— Lafayette  and 
the  two  South  Brooklyn  extensions,  on  $85,000,000  bids  received 
and  estimated  on  the  remainder,  will  cost,  including  station 
finish,  $123,000,000,  as  compared  with  $209,000,000,  the  cost  of 
construction  of  those  portions  as  given  by  certain  critics.  ’ ’ 

Owing  to  the  geological  formation  in  New  York,  (requiring 
a great  deal  of  rock  excavation  and  tunneling) , the  cost  greatly 
exceeds  what  can  be  expected  for  the  proposed  Chicago  subways. 

The  Fourth  Avenue  subway  in  Brooklyn,  extending  from 
Nassau  Street  to  Forty-third  Street,  3.9  miles  long,  cost  for  the 
straight  portion  $538,000  per  mile  and  for  the  whole  length, 
$855,000  per  mile  of  single  track.  This  latter  cost  is  due  to 
especially  difficult  construction  involving  subway  crossing  under 
the  old  one  at  two  places,  its  average  depth  being  42  feet  below 
street  grade,  over  twice  as  deep  as  the  one  proposed  here  and  its 
having  from  four  to  eight  tracks  on  different  levels. 

In  Toronto,  plans  and  specifications  were  made  for  a sub- 
way three  and  one-half  miles  long,  and  bids  were  asked  for. 
The  price  per  mile  of  single  track  bid  was  $539,400. 

It  might  be  stated,  in  addition,  that  this  Commission’s  esti- 
mate was  prepared  from  figured  quantities,  and  that  the  unit 
prices  applied  unquestionably  are  higher  than  the  work  would 
be  let  for  if  bids  were  asked. 

SUBWAY  PROFITS  CERTAIN. 

We  are  assuming,  of  course,  in  all  this  reasoning,  that  the 
city  must  show  a financial  profit  from  subway  construction  and 
operation  before  it  can  enlist  the  co-operation  of  capitalists. 
But  it  is  a demonstrated  fact  that  capital  is  always  eager  for 
profitable  investments.  If  it  can  be  shown  that  there  are  suf- 
ficient returns  in  sight  to  justify  the  expenditure,  the  financial 
battle  is  already  won. 

If  the  legality  of  the  Mueller  certificates  is  established  by 
a decision  of  the-  Supreme  Court,  and  the  city  builds  its  own 
subways,  there  cannot  be  any  apprehension  as  to  the  sale  of  such 
certificates  to  banking  interests,  or  syndicates  of  capitalists, 
strictly  on  their  intrinsic  merit  as  the  medium  of  a profitable 
investment.  In  this  way  subway  construction  may  proceed  to 
completion  without  saddling  one  cent  of  taxation  on  the  people 
of  Chicago. 

The  latter  applies  also,  of  course,  to  the  alternative  finan- 


13 


cial  proposition,  as  outlined  in  our  report — namely,  the  construc- 
tion of  Chicago’s  subways  by  private  capital  under  a form  of 
contract  in  which  the  city  is  absolute  owner  of  title  to  the  sub- 
ways, and  recompenses  the  builders  by  an  operating  lease  for 
a limited  term  of  years. 

Whichever  policy  is  finally  adopted  by  the  city,  the  same 
financial  rule  applies  that  there  is  more  than  sufficient  revenue 
from  subway  operation  in  sight  to  provide  for  all  fixed  charges, 
including  oi3erating  expenses,  interest  on  the  investment,  and  a 
sinking  fund  for  gradual  extinction  of  the  capital  debt.  The 
total  carrying  charges  will  be  met  by  the  earnings  from  the 
properties  themselves.  As  these  earnings  increase,  from  year 
to  year,  with  the  growth  of  population  and  traffic,  it  follows 
that  the  subways  will  not  only  pay  for  themselves  but  yield  a 
substantial  profit  to  the  city  in  future  years. 

Chicago  is  indebted  to  New  York  for  demonstrating  that  sub- 
ways can  be  built  and  operated  at  a handsome  profit.  Not  only 
has  New  York  demonstrated  this,  but  having  spent  $83,000,000 
in  subways,  although  it  took  nine  years  to  get  the  first  one  under 
contract,  it  is  now  showing,  in  conjunction  with  the  operating 
companies,  its  confidence  in  the  necessity  of  subways  by  spending 
jointly  a sum  that  will  make  the  total  cost  of  the  new  rapid 
transit  system  $347,000,000. 

And  this  has  been  done  without  an  additional  tax  of  one 
cent  on  private  property  owners. 

The  actual  profits  of  New  York’s  subways,  since  they  were 
opened,  have  been  from  9 per  cent  to  20  per  cent. 

At  the  present  moment,  while  waiting  for  more  subways  to 
be  built.  New  York’s  subways  are  literally  choked  and  gorged 
with  traffic.  They  are  carrying  over  200  people  in  a.  car  that  has 
a seating  capacity  of  50.  People  crowd  the  subways,  and  hang 
on  straps  rather  than  take  the  surface  or  elevated  cars  where 
they  can  get  seats.  That  is  why  the  subway  operating  company 
is  now  earning  20  per  cent.  The  people  demand  real  rapid 
transit. 

The  contract  for  the  first  New  York  subways  provided  that 
the  operating  company  should  pay  as  rental  the  interest  on  the 
bonds  issued  by  the  city,  plus  1 per  cent  per  annum  for  a sink- 
ing fund.  The  rental  for  the  year  ending  June  30,  1912,  was 
$2,312,943.  The  company’s  profits  from  the  operation  of  the 
road  are  more  than  double  this  amount.  The  contract  for  opera- 
tion of  the  new  subways  provides  first,  operating  expenses; 
second,  interest  on  the  investment;  third,  4 per  cent  for  sinking 


14 


fund— after  which  the  city  and  the  companies  share  and  share 
alike  in  the  profits.  Under  this  contract  the  city  expects  to  have 
a good  revenue  after  a few  years. 

SUBWAYS  BENEFIT  EXISTING  LINES. 

The  argument  that  the  building  up  of  passenger  traffic 
on  Chicago’s  subway  system  would  be  at  the  expense. of  existing 
transportation  lines  is  amply  disproved  by  New  York’s  experi- 
ence, where  subways  have  not  only  created  traffic  for  themselves 
but  increased  the  traffic  for  both  surface  and  elevated  lines. 

Chairman  Willcox,  of  New  York’s  Public  Service  Commis- 
sion, in  his  statement  of  November  16,  1910,  says: 

“The  actual  traffic  that  would  offer  itself  after  construction 
is  completed  can  only  be  judged  by  experience.  Engineers  of 
the  Rapid  Transit  Commission  figured  in  advance  that  the  ex- 
treme capacity  of  the  present  subway  would  he  around  800,000 
passengers  per  day.  Engineers  and  financiers  in  considering  the 
matter  of  bidding  on  the  original  contract  did  not  expect  that 
traffic  would  develop  beyond  400,000  passengers  a day.  The 
actual  traffic  has  exceeded  the  estimate  of  extreme  capacity.  In 
1899  when  the  present  or  Interhorough  subway  was  contracted 
for,  the  surface  lines  in  New  York  County  carried  360,000,000 
passengers  and  the  elevated  174,000,000.  Fears  may  then  have 
been  felt  that  the  subway  would  not  develop  its  own  traffic,  yet  in 
the  year  ending  June  30,  1910,  in  New  York  County,  the  surface 
line  carried  430,000,000,  the  elevated  293,000,000  and  the  Inter- 
borough subway  269,000,000.  With  these  in  mind,  the  argument 
that  the  Tri-Borough  would  afford  unnecessary  capacity  inas- 
much as  it  would  take  most  of  those  who  now  ride  on  the  ele- 
vated and  subway  falls  to  the  ground.  It  might  just  as  well 
have  been  stated  in  1899  that  to  build  a subway  to  carry  260,- 
000,000  would  take  away  all  of  the  traffic  from  the  elevated  and 
a part  of  the  traction  traffic,  while  the  facts  show  that  it  has  de- 
veloped not  only  its  own  traffic  of  269,000,000  and  is  crowded 
beyond  the  point  of  decency,  hut  the  surface  and  elevated  lines 
have  increased  33  per  cent.” 

When  the  sub-committee  of  your  honorable  body  was  in 
New  York  recently,  its  members  were  told  by  officials  of  the 
Public  Service  Commission  that  80  per  cent  of  the  people  of  New 
York  had  said  that  the  subways  could  not  be  built,  and  that  if 
built  they  could  not  pay.  The  parallel  between  the  same  class  of 
objectors  in  Chicago  and  tho’se  who  were  proven  wrong  in  New 


15 


York  may  be  illustrated  by  quoting  again  from  tbe  1905  report 
of  New  York’s  Ckamber  of  Commerce: 

‘‘The  foregoing  fails  to  convey  even  a faint  conception  of 
tbe  discouraging  delays  that  continually  beset  all  efforts  of  tbe 
Eupid  Transit  Commission  to  accomplish  tbe  object  for  wbicb 
it  was  created.  No  sooner  was  one  obstacle  surmounted  than 
anotber,  perhaps  more  formidable,  was  presented.  This  con- 
stant changing  of  the  aspect  of  tbe  question  made  necessary 
repeated  revisions  and  alterations  of  tbe  plans,  all  of  wbicb  took 
time.  Although  there  was  an  imperative  demand  for  rapid 
transit  by  tbe  people,  who  bad  by  a large  majority  of  their  votes 
sanctioned  municipal  ownership,  tbe  city  authorities  and  tbe 
courts  were  indisposed  to  promote  tbe  purpose.  Neither  tbe 
Manhattan  nor  tbe  Metropolitan  Company  seemed  at  all  anxious 
to  provide  increased  facilities,  unless  such  facilities  could  be 
given  upon  its  own  terms.  It  would  seem  as  if  tbe  former  com- 
pany bad  become  convinced  that  no  scheme  of  rapid  transit  could 
be  carried  to  successful  completion  without  its  assistance,  and 
that  if  tbe  plans  of  the  Commission  could  be  delayed  long  enough 
to  thoroughly  dishearten  tbe  Commission  and  tbe  people,  it 
would  have  the  opportunity  of  providing  rapid  transit  according 
to  its  own  plans  and  desires.” 

A further  comparison  might  be  drawn  between  tbe  probable 
available  traffic  from  subway  population  zones  in  Chicago  and 
New  York  at  periods  just  prior  to  the  beginning  of  subway  con- 
struction. For  instance: 

From  the  report  of  tbe  Public  Service  Commission  of  New 
York  City  for  1910  tbe  cost  of  tbe  initial  subway  system  of  New 
York  was  $83,309,689.47. 

The  population  of  New  York,  within  the  subway  zone,  i.  e., 
territory  one-half  mile  on  either  side  of  the  subway  routes  in 
1900,  when  tbe  contract  for  the  first  subway  system  was  let,  was 
985,000. 

Tbe  population  within  a similar  zone  adjacent  to  tbe  pro- 
posed subways  for  Chicago  at  end  of  1912  is  1,540,000. 

If  New  York,  with  its  985,000  people  located  within  tbe  sub- 
way zone,  could  afford  to  expend  $83,309,689.47,  Chicago,  under 
similar  conditions,  can  therefore  afford  to  expend  $130,000,0.00. 

Tbe  rides  per  capita  in  New  York  in  1900  were  246,  while  the 
rides  per  capita  in  Chicago  in  1900  were  217.  Tbe  rides  per 
capita  in  New  York  in  1910  were  321,  and  in  Chicago  the  rides 
per  capita  in  1910  were  also  321. 

The  population  of  New  York  in  the  last  decade  increased 


16 


1,340,000  and  the  rides  per  capita  increased  75,  while  the  popula- 
tion of  Chicago  increased  only  486,000  and  the  rides  per  capita 
increased  104. 

Thus  it  is  seen  that  Cliicago  conditions  are  not  vastly  dif- 
ferent from  New  York  conditions,  as  has  been  stated  here,  but  are 
just  as  favorable  as  they  were  in  New  York,  when  the  subway 
construction  was  undertaken. 


OTHEK  OBJEGTIONS  ANALYZED. 

With  regard  to  the  remaining  groups  of  objections  to  a 
comprehensive  and  independent  system  of  municipal  subways 
for  Chicago,  we  do  not  deem  any  elaborate  arguments  necessary 
to  show  that  they  disprove  themselves  when  analyzed  in  the  light 
of  demonstrated  facts. 

These  latter  objections,  which  are  inter-related,  and  may 
therefore  be  answered  together,  are  outlined  above  as  follows : 

(3)  That  an  independent  system  of  municipal  passenger 
subways,  even  with  a large  carrying  capacity  supplemental  to 
existing  lines,  would  increase,  rather  than  diminish,  traffic 
congestion  in  the  down-town  or  ‘‘loop”  district. 

(4)  That  the'  effect  of  a comprehensive  system  of  passen- 
ger subways  would  be  to  upbuild  the  business  facilities  of  the 
down-town,  or  “loop”  district,  at  the  expense  of  outlying  busi- 
ness and  residential  districts. 

(5)  Tliat  genuine  rapid  transit  in  Chicago  can  be  obtained 
by  making  new  contracts  with  a privately-owned  transportation 
monopoly,  such  contracts  to  include  the  exclusive  use,  for  oper- 
ating purposes,  of  such  limited  down-town  subways  as  may  be 
built,  at  the  city’s  expense,  to  enable  the  existing  companies  to 
get  rid  of  down-town  or  “loop”  district  congestion. 

THEOUGH-BOUTE  SUBWAYS. 

The  first  of  these  objections  falls  completely  to  the  ground 
when,  as  we  have  shown,  the  central,  or  “loop”  district  of  Chi- 
cago is  destined  to  be  not  the  terminal  but  a midway  point  in  the 
operation  of  through-route  rapid  transit  subv/ays. 

Eapid  transit  subways,  being  operated  from  one  end  of  the 
city  to  the  other,  will  not  need  the  ‘ ‘ loop  ’ ’ district  as  a terminal 
switching  yard,  as  the  surface  and  elevated  lines  find  it  profitable 
to  do,  for  double  fare  purposes. 

An  independent  system  of  municipal  subways  in  Chicago 


17 


would  have  a capacity  of  about  180,000  seats  per  hour,  which, 
of  course,  would  be  in  addition  to  the  capacity  of  existing  trac- 
tion systems. 

Such  a substantial  increase,  with  added  speed,  obtainable 
by  a free  movement  of  trains  through  the  congested  district, 
would  considerably  relieve  the  traffic  on  surface  lines.  Fewer 
surface  cars  would  be  required  to  reach  the  down-town  distiict, 
thus  relieving  traffic  congestion  there. 

Also,  through  route  subways  in  the  central  district  will 
enable  surface  car  companies  to  considerably  reduce  their  op- 
erating expenses,  which  are  hig'hest  in  the  congested  district, 
thus  enabling  them  to  build  up  a more  profitable  traffic  in  the 
outlying  districts  where  their  cars  will  become  feeders  for  tne 
rapid  transit  lines. 

Not  only  will  through  route  subways  relieve  “loop”  dis- 
rict  traffic  congestion;  they  will  inevitably  tend  toward  the 
expansion  of  the  down-town  business  district  beyond  the  present 
“loop”  barriers. 

Under  present  conditions  a great  portion  of  those  doing 
business  in  the  “loop”  district  are  located  there  because  their 
employes  can  reside  in  any  division  of  the  city  and  reach  their 
place  of  business  by  one  car  line,  one  fare  and  a reasonable  length 
of  time.  If  they  could  accomplish  the  same  result  at  a point  out- 
side of,  or  adjoining,  the  present  “loop”  district  where  the  rent 
and  other  expenses  would  be  much  less,  where  their  employes 
could  reach  their  place  of  business  by  one  fare,  and  rapid  transit 
from  any  of  the  outlying  districts,  in  less  time  than  they  do  at 
present,  is  it  not  reasonable  to  suppose  that  they  would  do  so? 

If,  instead  of  the  “loop”  district,  the  business  district  was 
extended  on  the  North,  "West  and  South  sides,  would  this  not 
relieve  congestion  ? 

Before  the  first  subways  were  opened  in  New  York  City, 
the  business  district  of  that  metropolis  was  practically  confined 
to  the  area  south  of  Fourteenth  Street.  Since  the  opening  of 
subways,  the  business  district  has  expanded  until  now  it  occupies 
practically  all  the  territory  south  of  Fifty-Ninth  Street. 

COMPAEISONS  WITH  NEW  YOBN. 

Much  stress  has  been  laid  by  opponents  to  subways  on  the 
alleged  dissimilarity  between  New  York  and  Chicago,  both  as 
regards  geographical  and  transportation  conditions. 

It  has  been  stated  that  in  New  York  “the  traffic  is  going  and 
comfing  at  the  same  time,  and  that  therefore  New  York  can  get 


18 


nearly  double  the  returns  proportionately  than  can  be  expected 
in  Chicago.” 

The  New  York  Public  Service  Commission,  in  its  report  of 
September,  1912,  says: 

“Owing  to  the  location  of  New  York  City  and  the  peculiar 
conformation  of  its  five  boroughs,  the  rapid  transit  require- 
ments are  exceedingly  difficult  to  satisfy.  The  business  center 
of  the  Greater  City,  which  is  the  goal  of  all  transportation  lines, 
is  not  the  center  of  the  city  at  all,  but  its  extreme  southwestern 
corner.  This  corner  is  composed  of  that  part  of  Manhattan 
Island  lying  south  of  59th  Street.  This  is  now  commonly  desig- 
nated as  the  business  section.  Generally  speaking,  the  northern 
part  of  this  district  is  the  locale  of  hotels,  theatres  and  retail 
stores,  while  the  southern  part  of  it  is  the  home  of  financial 
institutions,  wholesale  merchants,  municipal  offices,  courts,  rail- 
road freight  terminals  and  general  office  buildings.  Travel  on 
local  transportation  lines  is,  therefore,  all  toward  this  district 
in  the  morning  and  all  away  from  it  in  the  evening.  It  comes  in 
two  great  tides,  one  from  the  north,  conveying  hundreds  of  thou- 
sands from  upper  Manhattan,  The  Bronx,  and  the  New  York 
and  Connecticut  suburbs,  and  one  from  the  east,  bringing  other 
hundreds  of  thousands  from  Brooklyn  and  Queens  and  points 
further  out  on  Long  Island.  Similar  streams  flow  in  from  New 
Jersey  on  the  west  and  Staten  Island  on  the  south,  but  neither 
of  these  approaches  in  magnitude  the  inflow  from  the  north  or 
the  east.” 

CHICAGO’S  SPECIAL  ADVANTAGES. 

The  marked  advantage  that  Chicago  will  have  over  New 
York,  in  traffic  conditions,  is  easily  understood  when  we  remem- 
ber that  the  same  tide  of  morning  and  evening  travel  ebbs  and 
flows  to  and  from  a central  business  district  in  both  cases. 

In  Chicago’s  case,  the  heavy  morning  tide  of  subway  pas- 
sengers will  be  unloaded  when  the  through  route  subway  train 
has  only  half  completed  its  journey  to  its  destination  on  the 
opposite  side  of  the  city  from  its  starting  point.  On  its  return 
journey  it  will  again  absorb  a heavy  tide  of  subway  traffic,  and 
discharge  it  mid-way  between  its  starting  point  and  its  desti- 
nation. 

Again,  as  the  average  subway  haul  to  and  from  Chicago’s 
business  district,  from  the  outlying  districts,  will  be  very  much 
less  than  New  York’s  subway  haul  for  the  average  ride  to  or 
from  the  business  district,  it  naturally  follows  that  the 


19 


Chicago  subway  traffic  should  be  the  more  profitable,  and  that 
there  should  be  less  “dead  mileage.” 

EEASOhTS  FOE  EECOM]\IENDINO  DEFINITE  SUBWAY 

EOUTES. 

The  subway  routes  as  recommended  in  our  report  of  Sep- 
tember 10  are  laid  out  on  lines  of  established  travel,  thus  serv- 
ing the  greatest  number  of  people,  namely,  those  doing  business 
in  the  central  district,  and  at  the  same  time  connecting  the  dif- 
ferent divisions  of  the  city. 

Official  records  show  the  revenue  traffic  in  Chicago  for  the 
year  1911  to  be  as  follows: 

Surface  lines 560,969,655 

Elevated  lines 162,973,594 

Total 723,943,249 

Observations  made  show  that  the  traffic  to  or  from  the  dis- 
trict bounded  by  Chicago  Avenue,  12th  Street,  Halsted  Street 
and  Lake  Michigan  is: 

38.8  per  cent  of  the  total  surface  traffic 217,656,000 

88.3  per  cent  of  the  total  elevated  traffic.  . . .143,906,000 


Total 361,562,000 

In  other  words,  the  traffic  to  and  from  the  central  district 
of  the  city  is  50  per  cent  of  the  total  surface  and  elevated  traffic 
in  the  entire  city.  In  addition  to  this  traffic  the  subways  will  ac- 
commodate all  the  local  traffic  on  the  different  lines  outside  of 
the  down-town  district. 

In  addition  to  the  subway  projected  through  the  loop  dis- 
trict, the  proposed  Halsted  Street  subway  will  provide  means  of 
reaching  the  North,  West  and  South  Sides,  without  going 
through  the  loop  district. 

When  conditions  require,  additional  subways  should  be  con- 
structed in  Ashland,  Western,  or  other  thoroughfares,  but  as  the 
traffic  in  Ashland  Avenue  is  only  2-1/10  per  cent,  Eobey  Street 
1-4/10  per  cent  and  in  Western  Avenue  2-8/10  per  cent  of  the 
total  surface  line  traffic  in  the  city,  it  does  not  appear  that  the 
time  is  yet  ripe  for  the  construction  of  subways  in  these  thor- 
oughfares. 

SUBWAYS  AID  OUTLYING  DISTEICTS. 

As  to  the  objection  that  Chicago’s  subways,  on  a compre- 
hensive plan,  would  build  up  the  business  prosperity  in  the 
“loop”  district  at  the  expense  of  outlying  districts,  we  will 


20 


simply  quote  from  au  independent  investigation  made  by  the 
City  Club  of  New  York  as  to  the  general  effect  of  subways  on 
business  and  real  estate  values. 

The  City  Club,  after  a thorough  investigation  of  the  increase 
in  real  estate  values,  before  and  after  the  building  of  subways, 
reported  in  1908  that  in  the  borough  of  Manhattan  “the  aggre- 
gate rise  in  land  from  135th  Street  to  Spuyten  Duyvil  was  about 
$69,300,000.  If  an  estimated  normal  rise  of  $21,100,000,  based 
upon  the  rise  of  the  previous  seven  years,  be  subtracted  from 
this,  it  leaves  a rise  of  about  $49,200,000,  apparently  due  to  the 
building  of  subways.” 

As  regards  the  effect  on  land  values  in  the  Borough  of 
Bronx,  the  same  report  says;  “The  aggregate  increase  in  land 
values  (of  a district  extending  about  a half  mile  either  side  of 
the  subway)  due  to  the  building  of  the  subway  and  in  excess  of 
a normal  rise  of  $13,500,000,  was  about  $31,300,000.” 

The  report  continues:  “The  property  benefited  in  the  dis- 
tricts above  noted  could  have  paid  the  entire  cost  of  subways 
and  yet  have  had  a net  profit  due  solely  to  their  construction  and 
operation  of  over  $37,500,000.  Had  it  paid  only  for  the  portion 
running  through  its  own  territory,  there  would  have  remained  a 
profit  of  over  $67,425,000.” 

We  merelj^  quote  the  above  as  striking  instances  of  the  direct 
benefit  upon  outlying  real  estate  values — and  consequently  upon 
all  business  and  residence  property — of  transportation  improve- 
ments. 

We  do  not  have  to  go  to  New  York  but  can  find  similar  in- 
stances all  over  Chicago’s  outlying  districts.  Even  the  crudest 
forms  of  transportation  betterments  stimulate  suburban  growth. 
Every  time  a surface  car  line,  or  an  elevated  line,  is  extended 
into  new  territory  it  creates  new  “neighborhood”  business  sec- 
tions, and  increases  the  value  of  nearly  all  real  estate  holdings. 

If  we  want  another  concrete  instance  of  this  inevitable 
“cause  and  effect”  from  New  York  it  will  be  found  in  the  re- 
markable increase  in  surface  car  traffic  in  the  Borough  of  Bronx, 
amounting  to  138  per  cent  in  five  years.  This  increase  in  surface 
car  traffic  was  directly  due  to  the  opening  of  subways,  and  to  the 
beneficial  effect  the  latter  had  on  the  growth  of  outlying  districts. 

PER' ATE  MONOPOLY  VS.  PUBLIC  MONOPOLY. 

Dealing  with  the  claim  by  opponents  of  a comprehensive 
system  of  municipal  subwa^^s  in  Chicago  that  the  times  only  call 
for  a limited  down-town  subway  system,  to  be  exclusively  used 


21 


by  a privately-owned  transportation  monopoly,  we  must  neces- 
sarily  admit  that  such  an  attempted  solution  of  Chicago ’s  trans- 
portation problem  would  mean,  as  a preliminary,  the  merger  of 
existing  traction  systems  into  a single  monopoly. 

We  must  also  admit,  at  the  outset,  that  the  City  of  Chicago’s 
consent  to  such  a merger  of  private  transportation  interests 
would  be  accompanied  by  a contract,  giving  not  only  exclusive 
transportation  privileges  to  a private  concern  but  so  hedging  the 
contractual  relations  between  the  city  and  company  that  the 
former  would  guarantee  all  risks,  in  the  nature  of  fixed  charges. 
In  other  words,  the  city  would  bear  the  real  financial  burden  of 
subway  construction  and  operation,  while  giving  to  a privately- 
owned  transportation  corporation  the  privilege  of  determining 
the  quality  of  service,  besides  giving  to  the  private  corporation 
a fixed  share  of  surplus  profits  after  all  guaranteed  fixed  charges 
had  been  met. 

We  do  not  feel  called  upon  to  go  into  an  elaborate  argument 
as  to  the  dangers  attending  this  method  of  attempting  to  get 
genuine  rapid  transit  in  Chicago  from  a private  transportation 
monopoly. 

Each  member  of  your  honorable  body  is  fully  informed,  in 
the  light  of  experience,  as  to  these  dangers. 

We  will  merely  take  up  one  or  two  points  relative  to  the 
conditions  of  a probable  merger  of  existing  transportation  lines, 
prior  to  the  occupancy  of  a limited  down-town  subway  system 
under  a new  contract  with  the  city. 

HOW  MERGER  PLANS  AFFECT  CITY. 

A great  deal  has  been  said  in  a general  way  as  to  the  merger 
of  the  elevated  and  surface  lines.  While  there  has  been  no 
definite  plan  or  basis  outlined,  the  general  proposition  from  the 
traction  side  has  been  to  follow  the  1907  ordinances.  It  would 
be  impossible  to  have  two  distinct  financial  schemes,  one  for  the 
surface  lines  and  one  for  the  elevated  lines.  If  this  plan  were 
followed,  the  results  would  be  an  agreed  valuation  of  the  eleva- 
ted roads.  To  this  valuation  should  be  added  the  following : 

1st — The  cost  of  making  each  of  the  roads  a four-track 
structure. 

2nd — The  cost  of  additional  terminals,  new  rolling  stock, 
additional  electrical  power  and  equipment. 

Taking  the  value  of  these  roads  as  represented  by  theElevated 
Company,  $93,000,000,  the  necessary  additions  as  quoted  above 
would  be  at  least  $40,000,000,  making  a total  of  $133,000,000. 


The  purchase  price  of  the  surface  lines  February  1,  1912, 
was  $127,500,000.  This  would  make  a total  of  $260,000,000  to 
start  with,  on  which  the  companies  would  he  allowed  5 per  cent 
or  $13,000,000. 

The  operating  expense  for  1911  surface  lines  was  $19,- 
473,571;  elevated,  1910,  $5,810,128;  total,  $25,283,699.;  making 
a total  for  interest  and  operating  expense  of  $38,283,699. 

To  this  should  he  added  interest  on  cost  of  down-town  sub- 
way, 5 per  cent  on  $10,000,000  equals  $500,000. 

The  total  receipts  were  about  $37,900,000,  or  over  $300,000, 
less  than  the  amount  required  on  the  purchase  price. 

In  other  words,  the  cost  to  the  city  would  be  the  55  per  cent 
it  is  now  receiving,  equal  to  $1,870,000,  in  1912. 

It  would  be  simply  turning  the  55  per  cent  “traction  fund’' 
over  to  the  elevated  roads  to  pay  interest  on  a ficticious  valuation. 

There  would  be  no  objection  to  the  city’s  share  of  traction 
profits  being  wiped  out  if  the  nickel-payers  were  getting  the 
benefit.  But  why  should  the  city  turn  this  $1,870,000  to  the  stock* 
holders  of  the  elevated  roads'? 

However,  this  is  not  the  most  objectionable  feature  of  the 
merger. 

Section  23  of  the  1907  ordinance  reads  as  follows : 

“In  the  event  that  the  said  street  railways  are  not  purchased 
by  the  said  City  or  its  licensee  as  hereinabove  authorized,  prior 
to  February  first,  A.  D.  1927  (and  nothing  in  this  ordinance  con- 
tained shall  be  construed  as  being  in  any  event  a grant  to  the 
Company  extending  beyond  February  first,  1927),  the  said  City 
shall  have  the  right  to  designate  any  person,  firm  or  corporation 
having  lawful  authority  to  acquire,  own  and  operate  street  rail- 
ways in  said  City  as  its  licensee,  to  purchase  the  said  street 
railways,  property  and  rights  of  the  Company  at  or  after  Feb- 
ruary first,  1927,  upon  the  same  terms  that  the  City  could  then 
purchase,  and  in  case  such  reserved  right  of  purchase  be  not 
exercised  by  the  said  City  or  its  licensee  and  the  City  shall  grant 
a right  to  another  company  to  operate  a street  railway  in  the 
streets  and  parts  of  streets  constituting  the  said  street  railway 
system  of  the  Company  such  new  company  shall  he  required  to 
and  shall  purchase  and  take  over  the  said  street  railways,  prop- 
erty and  rights  of  the  Company  at  or  after  February  first,  1927, 
upon  tl;e  same  terms  upon  which  the  said  City  might  then  pur- 
chase and  take  them  over.” 

If  a similar  section  is  in  the  merger  ordinance  it  means  that 


23 


the  city,  before  it  can  regain  control  of  its  streets  or  its  sub- 
way, must  pay  the  purchase  price  as  it  is  of  that  date. 

’^Miat  that  will  be  can  be  imagined.  If  it  would  amount  to 
$260,000,000,  when  the  subways  are  constructed,  what  would  it 
be  at  the  end  of  the  franchise? 

It  is  safe  to  say  $300,000,000  at  least. 

It  must  be  borne  in  mind  that  there  is  no  depreciation 
allowed,  and  no  sinking  fund  provided  for.  The  city  would 
receive  for  its  money  a depreciated,  obsolete  plant  probably 
worth  25  to  50  per  cent  of  the  then  purchase  price. 

Yet  if  the  city  or  its  agent  does  not  pay  this  purchase  price 
it  cannot  regain  possession  of  its  streets  or  its  subways. 

In  other  words,  the  franchise  is  perpetual,  so  far  as  the  occu- 
pancy of  the  streets  and  subways  is  concerned,  but  the  obligation 
to  pay  the  city  any  55  per  cent  or  other  share  of  profits  would 
have  ceased.  In  other  words,  the  company  will  dictate  the  terms 
of  any  future  ordinance. 

Are  the  people  of  Chicago  ready  now  to  turn  over  to  the 
transportation  companies  the  only  method  by  which  they  can  get 
rapid  transit,  namely,  the  place  for  subways? 

Compare  this  kind  of  financiering  with  the  plan  suggested, 
in  our  report,  as  one  of  the  alternative  propositions — namely,  to 
build  Chicago’s  subway  by  the  enlistment  of  private  capital 
under  the  city’s  direction. 

The  city  can  take  over  the  subways  and  equipment  after  a 
certain  number  of  years  upon  payment  to  the  operating  com- 
pany of : 

The  amount  of  money  expended  plus  an  agreed  per  cent  for 
profit. 

Less  the  depreciation. 

Less  the  amount  accrued  in  the  sinking  fund,  created  for 
amortization  of  the  capital  debt. 

Less  any  deferred  maintenance  charges. 

If  the  contract  continues  to  the  end,  then  the  entire  property 
shall  be  turned  over  to  the  city  without  further  payment,  a sink-, 
ing  fund  having  been  created  for  extinction  of  the  entire  capital 
debt  out  of  earnings. 

SUEFACE  CAE  SUBWAYS. 

There  have  been  some  suggestions  that  if  a down-town  sub- 
way system  only  were  built,  the  surface  car  companies  should  be 
allowed  to  use  such  subways  to  relieve  congestion. 

An  allowance  of  20  seconds  headway  between  surface  cars 


24 


would  give  180  cars  per  hour.  Forty  seats  to  the  car  would  give 
7,200  seats  per  hour. 

Subway  or  elevated  in  subway  with  trains  1'30"  headway 
and  10-car  trains  would  give  40  10-car  trains,  or  400  cars  per 
hour.  With  50  seats  to  a car  this  equals  20,000  seats  per  hour. 

The  cost  of  the  subways  would  be  the  same— unless  entrance 
toi  surface  car  subways  would  be  put  at  each  street  corner  when 
the  surface  car  subways  would  cost  more. 

If  the  cost  is  the  same,  then  the  surface  car  subway  will 
cost  nearly  300  per  cent  more  for  each  passenger  than  the  rapid 
transit  subway  will  cost  per  passenger. 

In  the  operation  of  the  surface  car  subway,  it  is  a question 
if  the  cars  can  be  operated  at  20"  headway;  for  instance,  take 
a subway  for  the  North  and  South  sides;  there  are  about  15 
different  surface  routes  on  the  North,  nearly  as  many  on  the 
South;  unless  a certain  percentage  of  cars  from  each  of  these 
routes  is  taken  through  the  subway  there  will  be  complaints  of 
discrimination  from  the  section  whose  routes  do  not  go  into  the 
subway ; on  the  other  hand,  if  a percentage  of  each  route  is  taken 
through  the  subway  it  means  a concentration  and  confusion  of 
traffic  at  the  station  which  it  would  be  impossible  to  avoid.  It 
must  be  remembered  that  the  rapid  transit  cars  have  four  en- 
trances to  the  cars,  while  the  surface  cars  have  but  one.  The 
entrance  to  rapid  transit  cars  is  on  a level  with  the  platform, 
while  the  surface  cars  have  steps. 

It  is  the  loading  and  unloading  that  will  govern  the  headway. 

If  rapid  transit  subways  are  built,  surface  car  subways 
will  not  be  necessary  because  the  greater  percentage  of  surface 
cars  coming  into  the  down-town  district  from  the  outlying  dis- 
tricts can  be  discontinued  and  be  used  for  local  or  short  haul, 
thus  relieving  the  surface  lines  of  the  long  haul  which  they  claim 
is  unprofitable. 

Capacity  of  present  elevated  roads  during  rush  hours  is 
45,000  seats ; capacity  as  estimated  by  subway  plan  160,000  seats,  j 

A surface  car  subway  would  take  180  cars  off  the  streets.  A i 
rapid  transit  subway  would  take  500  cars  off  the  streets,  at  the  ] 
same  cost.  i 


(Signed) 


Eespectfully  submitted, 

(Signed)  John  Ekicson, 


(Signed) 

(Signed) 

William  J.  Shanks, 


James  J.  Eeynolds, 

E.  C.  Shankland, 

Commissioners. 


Secretary. 


1 


RU8H  HOURTKArrlC 


JOHN  P.  NIOOtNe  PfllffTER 


